Private exchange SecondMarket announced that it completed $115.4 mn in private company stock transactions in the first quarter of this year, and the details behind the number are fascinating, especially on the eve of the LinkedIn IPO.
The overwhelming majority of transactions came from the consumer products and services sector, which accounted for 95 per cent of the action on SecondMarket in Q1. It was followed by software (4 per cent) and clean technology (1 per cent). In the fourth quarter of 2010, only 56 per cent of the transactions came from consumer products and services. Buy-side demand for consumer products and services was more than double sell-side demand.
Individuals played a larger role in SecondMarket in Q1, with high-net-worth investors completing 60 per cent of the transactions. In the previous quarter, venture capital funds had the top spot, with 40 per cent of the transactions. SecondMarket explains:
Several factors drove an increase in market participation from HNWI investors last quarter. First, private companies continued to become more open to individual investors, minimising usage of Right of First Refusal (ROFR) and allowing more individual investment purchases to close. Second, due to efficiencies implemented in SecondMarket’s auction and settlement processes, our Private Company Market was able to lower the minimum purchase amount for many auctions, enabling more HNWI investors to participate.
For the third quarter in a row, Facebook was the most watched company on SecondMarket, with Twitter coming in a distant second, a position it has held for two quarters in a row. Groupon, LinkedIn and Zynga round out the top five. Foursquare, Pandora, Skype and Gilt Groupe appeared on the SecondMarket list for the first time.
For more information, see the details furnished by SecondMarket.